Page 21 - The Insurance Times August 2024

The 5% rate will apply from Rs 3 lacs to 7 lacs rather than 11.11 lac crore rupees for Capital expenditure.
Rs 6 lacs at present.
Rs 1 lac crore for Research and Innovations.
Similarly the 10% rate kicks in at Rs 10 lacs instead of Rs 9
lacs. 1000 Industrial Training Institutes to be upgraded.

The result is a saving of further Rs 10000 for those with Providing Internships to one crore youth , with interns
annual incomes of Rs 10 lacs or more. Those opting for the receiving a stipend of Rs 5000 pr month and one time
Old Rewgime will not get any of these. Their exemption assidtance of Rs 6000.
limits etc remain the same. Standard Deduction also remains
the same- Rs 50000. Rs 2 lac crores over 5 years for creating jobs for youth and
for on skilling them.
The other tax slabs for income exceeding Rs 10 lacs under
the New Regime remain the same. The Insurance man in me- although I am a 78 year old
pensioner- tells me that scope for our Field Force is enormous
For Development Activities for improving their new business and thereby increasing the
Provision of Rs 1.52 lac crore for agriculture and allied status of our Insurance Behemoth.
sectors.
Overall Picture
Upto Rs 10 lac support to students for domestic institution
The overall mood in the country is excellent following the
studies.
presentation of the Union Finance Budget and I am sanguine
Rs 2.66 lac crore for rural development and infrastructure. that LIC and its dedicated team will grab this opportunity
Three crore more houses under PM Awas Yojana. to enhance their business so that we shall march towards
our avowed objective of INSURANCE FOR ALL BY 2047.
Mudra loan limit enhanced to Rs 20 lacs from Rs 10 lacs.
12 Industrial Parks sanctioned. JAIHIND.

Risk-based supervision model for insurers in works

IRDAI may consider implementing a risk-based supervision model, similar to that in the banking sector, which will estab-
lish principles for managing operational, market, and governance risks in the insurance industry, said Keki Mistry, chair-
man of HDFC Life. Mistry, during the company's 24th annual general meeting, underscored the positive strides made by
the Insurance Regulatory and Development Authority of India (IRDAI) in recent years, such as enhancing commercial
and operational flexibility through management expense regulations, raising sub-debt limits, and introducing the Bima
Trinity - Bima Vistaar, Bima Vahak, and Bima Sugam.

Life Insurers tweak products, incentives to protect margins

Life insurers in India are working on ways to navigate new guidelines from the IRDAI, which mandate paying surrender
value from the first year on non-participating policies. While all insurers will need to tweak their product offerings to
comply with the new rules, insurers are trying to maintain margins at existing levels.
HDFC Life is restructuring distribution payouts with deferrals and clawback provisions to address early surrender impacts. ICICI
Prudential Life is focusing on trial-based commission following its ULIP (unit-linked insurance plan) product structure, while SBI
Life is maintaining its current commission structure and expects the current ULIP-heavy product mix to minimise margin impact.
Apart from first-year surrender, the new rules allow the discount rate for calculating paid-up values to be up to 50 basis points
above the benchmark 10-year government securities yield. Currently, it is the same as the benchmark yield. Despite the
regulatory changes, insurers are confident of sustaining growth and protecting margins through these steps.

HDFC Life is restructuring its distribution payouts with deferrals and clawback provisions to mitigate early surrender
impacts, the company's management said during the earnings call. The company has talked about a gross impact of
approximately 100 bps on the value of new business (VNB) margin due to higher surrender value payables on early exits.

20 August 2024 The Insurance Times